NYC Letter: Trust Team Barry, Part IX

Day 217 of CHOPE

We are back.

Mr. Obama couldn't push his junk health care reform through a Democrat-controlled Congress before its August recess -- turning slow-news August into all-news August. We will have several stories to back-file.

Where to jump in?

Let's start back in March.

$1 TRILLION DEFICITS SEEN FOR NEXT 10 YEARS

WASHINGTON March 20, 2009 (CPD/AP) - President Barack Obama's budget would produce $9.3 trillion in deficits over the next decade, more than four times the deficits of Republican George W. Bush's presidency, congressional auditors said Friday.

The new Congressional Budget Office figures offered a far more dire outlook for Obama's budget than the new administration predicted just last month -- a deficit $2.3 trillion worse. It's a prospect even the president's own budget director called unsustainable.

... By CBO's calculation, Obama's budget would generate deficits averaging almost $1 trillion a year of red ink over 2010-2019.

Worst of all, CBO says the deficit under Obama's policies would never go below 4 percent of the size of the economy, figures that economists agree are unsustainable. By the end of the decade, the deficit would exceed 5 percent of gross domestic product, a dangerously high level.

White House budget chief Peter Orszag said that CBO's long-range economic projections are more pessimistic than those of the White House, private economists and the Federal Reserve and that he remained confident that Obama's budget, if enacted, would produce smaller deficits.

Even so, Orszag acknowledged that if the CBO projections prove accurate, Obama's budget would produce deficits that could not be sustained. Mr. Orszag:

Deficits in the, let's say, 5 percent of GDP range would lead to rising debt-to-GDP ratios that would ultimately not be sustainable.

And just to press the point.

OBAMA’S DEFICIT PROJECTIONS OFF BY $2.3 TRILLION,
CONGRESSIONAL BUDGET OFFICE SAYS

March 24, 2009 (CNS) - The nonpartisan Congressional Budget Office (CBO) says that President Obama’s budget and deficit projections are too low. The president’s budget will incur $9.3 trillion in federal deficits between 2010 and 2019 --$2.3 trillion higher than Obama had originally claimed.

... By 2019, the CBO said, a whopping 82 percent of the nation’s gross domestic product (GDP) will go to pay down the national debt. This means that in future years, the government could owe its creditors more than the goods and services that the entire economy can produce.

White House budget chief Peter Orszag, in a March 20 conference call, admitted that deficits in the range of 5 percent of GDP are not sustainable. The CBO analysis, however, said the Obama budget would incur a debt-to-GDP ration of 5.3 percent for the Fiscal Year 2010 to Fiscal Year 2019 period.

Who to believe? Mr. Orszag?

Again, I don't know what spiraling debt you're referring to, but we're inheriting a budget situation that is a mess, and that we're working our way out of. And under both budget resolutions, the deficit is reduced in half -- by more than half by 2013, and actually then is either stable or declining between 2013 and 2014. So I guess I just -- I take issue with the conjecture that we're -- you know, there's spiraling debt here.

Q: Well, I was referring to your original proposal.

Sorry?

Peter Orszag,
Director, Office of Management and Budget,
clueless on his handiwork quadrupling the deficit
this year and compounding deficits into the distant future
PRESS CONFERENCE March 25, 2009 (NYT/White House)

[Pause.] Or the CBO?

Notwithstanding Team Barry's feeble budget-cutting headlines (and here and here and here and here), the CBO proves out.

OBAMA TO RAISE 10-YEAR DEFICIT TO $9 TRILLION

WASHINGTON August 21, 2009 (Reuters) - The Obama administration will raise its 10-year budget deficit projection to approximately $9 trillion from $7.108 trillion in a report next week, a senior administration official told Reuters on Friday.

The higher deficit figure, based on updated economic data, brings the White House budget office into line with outside estimates and gives further fuel to President Barack Obama's opponents, who say his spending plans are too expensive in light of budget shortfalls.

The White House took heat for sticking with its $7.108 trillion forecast earlier this year after the Congressional Budget Office forecast that deficits between 2010 and 2019 would total $9.1 trillion. The senior administration official:

Our budget projections are now in line with the spring and summer projections that the Congressional Budget Office put out.

That's a 28.5% beep-up. By Team Barry standards of miscalculation that may not seem like much, but the percentage masks the sheer enormity.

It's a good guess Team Barry's Obamacare estimates are just as competent.

Q: At what point do we run out of money?

Well, I mean, we're out of money now.

Mr. Obama,
Spender-in-chief, answering the $24 trillion question
INTERVIEW May 23, 2009 (C-Span)

CHOPE.

Getting it right. After the fact.

Posted by Damian at August 25, 2009 04:30 PM